Why Are Hospital Bills So Complex?

Hospital billing is complex and based on many factors, including required equipment and supplies, levels of staffing and routine maintenance costs which may fluctuate on a daily basis. Additionally, hospitals must be prepared to care for any illness or major accident 

24 hours a day, 7 days a week.  

Every patient’s case is unique and may require different levels of care. 

understanding hospital bills

Breakdown of the Bill

All of the information necessary for a hospital to request reimbursement from an insurer is found on the bill.  Patient demographic information, descriptions of the services provided, codes representing the services provided and associate charges are represented on the patient bill.


The cost of implants is a very large component of the hospital bill and represents a large variable

 Vendors of hip and knee implants, pacemakers and other expensive implantable devices often have pre-existing relationships with the physicians they serve. Hospitals have to pay for these products even if the product is not adequately reimbursed by insurers.  Physician and hospital alignment would help contain implant costs. 

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Supplies are used during surgery and throughout the hospital stay, many hospitals include

Supplies used during surgical procedures may be included in the OR charge or charged as a separate line item in the CDM depending upon facility preference, making it difficult to compare the true cost of the procedure between facilities.  Medicare has been bundling the cost of supplies since August of 2000, when the Outpatient Prospective Payment System was implemented.


Pharmaceutical manufacturers often have an existing relationship with the physicians who prescribe their products. The hospital must provide the drug(s) that are prescribed by the physician. Additional challenges include fluctuating drug prices from multiple pharmaceutical companies who make the same drug.

Anesthesia & Recovery

CMS recognizes that anesthesia and recovery can be a source of confusion among patients who receive two separate bills, one from the anesthesiologist and one from the hospital. The hospital charges for anesthesia and recovery time to cover the costs of the drugs, equipment and hospital staff required during the course of the surgical procedure, while the physician charges for their professional time spent monitoring the patient.

Patient FAQs

This section provides many patient FAQ's